Intia, Jr. vs. Commission On Audit

SUPREME COURT REPORTS ANNOTATED VOLUME 306 24/06/2019, 2*03 PM
VOL. 306, APRIL 30, 1999 593

Intia, Jr. vs. Commission on Audit
*
G.R. No. 131529. April 30, 1999.
IRINEO V. INTIA, JR., Postmaster General, Philippine

Postal Corporation, and the Legal Officers of the PPC-Main
namely, WILFREDO B. SERRANO, MA. TERESA A.
LORICO-GONZALES, LEONARDO C. DARANTINAO,
JR., HENRY C. FAUSTO, LEE P. VICERAL, ROMAN T.
COBRADO, JESSIE R. REOTUTAR, ROMUALDO L.
BANAN, and ELEN I. NAGTALON, petitioners, vs. THE
COMMISSION ON AUDIT and the CORPORATE
AUDITOR FOR PHILIPPINE POSTAL CORPORATION,
respondents.
Administrative Law; Allowances; It is conceded that the PPC,

by virtue of its charter, Republic Act No. 7354, has the power to fix
the salaries and emoluments of its employees.·It is conceded that
the PPC, by virtue of its charter, R.A. No. 7354, has the power to fix
the salaries and emoluments of its employees. This function, being
lodged in the Postmaster General, the same must be exercised with
the approval of the Board of Directors. This is clear from Sections
21 and 22 of said charter.
Same; Same; The term „compensation‰ includes salaries, wages,
allowances and other benefits.·Petitioners correctly noted that
since the PPC Board of Directors are authorized to approve the
CorporationÊs compensation structure, it is also within the BoardÊs
power to grant or increase the allowances of PPC officials or
employees. As
________________
* EN BANC.
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594 SUPREME COURT REPORTS ANNOTATED
can be gleaned from Sections 10 and 17 of P.D. No. 985 (A Decree

Revising the Position Classification and Compensation System in
the National Government, and Integrating the Same), the term
„compensation‰ includes salaries, wages, allowances, and other
benefits.
Same; Same; Allowances such as RATA are included in the term
„emoluments‰ which, under Section 21 of Republic Act 7354, the
Postmaster General is authorized to grant to PPC personnel with the
approval of the Board of Directors.·Allowances such as RATA are
included in the term „emoluments‰ which, under Section 21 of RA
7354, the Postmaster General is authorized to grant to PPC
personnel with the approval of the Board of Directors. BlackÊs Law
Dictionary defines „emolument‰ as that which is received as a
compensation for services, or which is annexed to the possession of
office as salary, fees and perquisites.
Same; Same; The BoardÊs discretion on the matter of personnel
compensation is not absolute as the same must be exercised in
accordance with the standard laid down by law.·In other words,
the general rule is that the PPC is covered by the Civil Service Law
as regards all personnel matters except those affecting the
compensation structure and position classification in the
corporation which are left to the PPC Board of Directors to
formulate in accordance with law. It must be stressed that the
BoardÊs discretion on the matter of personnel compensation is not
absolute as the same must be exercised in accordance with the
standard laid down by law, that is, its compensation system,
including the allowances granted by the Board to PPC employees,
must strictly conform with that provided for other government
agencies under R.A. No. 6758 (Salary Standardization Law) in
relation to the General Appropriations Act. To ensure such
compliance, the resolutions of the Board affecting such matters
should first be reviewed and approved by the Department of Budget
and Management pursuant to Section 6 of P.D. No. 1597.
Statutory Construction; The failure to add a specific repealing

clause indicates that the intent was not to repeal any existing law,
unless an irreconcilable inconsistency and repugnancy exist in the
terms of the new and old laws.·Contrary to petitionersÊ position,
said provision still applies and has not been repealed either
expressly or impliedly. Their reliance on the general repealing
clause in Section 35 of R.A. No. 7354 is erroneous. The holding of
this Court
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VOL. 306, APRIL 30, 1999 595
in Mecano vs. COA is instructive: „The question that should be

asked is: What is the nature of this repealing clause? It is certainly
not an express repealing clause because it fails to identify or
designate the act or acts that are intended to be repealed. Rather, it
is an example of a general repealing provision, as stated in Opinion
No. 73, s. 1991. It is a clause which predicates the intended repeal
under the condition that a substantial conflict must be found in
existing and prior acts. The failure to add a specific repealing clause
indicates that the intent was not to repeal any existing law, unless
an irreconcilable inconsistency and repugnancy exist in the terms of
the new and old laws. This latter situation falls under the category
of an implied repeal.‰
Same; There is no express repeal of Section 6, Presidential
Decree No. 1597, by Republic Act No. 7354; Neither is there an
implied repeal thereof because there is no irreconcilable conflict
between the two laws.·As the Solicitor General correctly observed,
there is no express repeal of Section 6, P.D. No. 1597, by R.A. No.
7354. Neither is there an implied repeal thereof because there is no
irreconcilable conflict between the two laws. On the one hand,
Section 25 of R.A. No. 7354 provides for the exemption of PPC from
the rules and regulations of the CPCO. On the other hand, Section 6
of P.D. 1597 requires PPC to report to the President, through the
DBM, the details of its salary and compensation system. Thus,
while the PPC is allowed to fix its own personnel compensation
structure through its Board of Directors, the latter is required to
follow certain standards in formulating said compensation system.

Same; Statutes should be construed in light of the objective to be
achieved and the evil or mischief to be suppressed.·Section 25 of
R.A. No. 7354 and Section 6 of P.D. No. 1597 can thus be read
together and harmonized to give effect to both provisions. This
Court has held that statutes should be construed in light of the
objective to be achieved and the evil or mischief to be suppressed,
and they should be given such construction as will advance the
object, suppress the mischief, and secure the benefits intended.
Same; Repeals by implication are not favored; A law cannot be
deemed repealed unless it is clearly manifest that the legislature so
intended it.·Therefore, no implied repeal can be deduced in this
case. Worth reiterating is the rule in statutory construction that
repeals by implication are not favored. When statutes are in pari
596
materia, they should be construed together. A law cannot be deemed

repealed unless it is clearly manifest that the legislature so
intended it.
SPECIAL CIVIL ACTION in the Supreme Court.

Certiorari.
The facts are stated in the opinion of the Court.

The Director, Legal Service, Ma. Teresa A. Lorico-
Gonzales and Wilfredo B. Serrano for petitioners.
The Solicitor General for respondents.
ROMERO, J.:
In this special civil action under Rule 64 of the New Rules

of Court, in relation to Rule
1
65 thereof, petitioners seek the
reversal of the Decision dated November 4, 1997 of public
respondent Commission on Audit (COA) which affirmed the
disallowances made by respondent Corporate Auditor for
Philippine Postal Corporation (PPC) of the Representation
and Transportation Allowance (RATA) of certain officials of

PPC. The dispositive portion of said decision reads:
„Upon all the foregoing considerations, this Commission affirms the

disallowances made by the Auditor as concurred in by the Director,
Corporate Audit Office II, this Commission. Accordingly, the instant
appeal has to be, as it is hereby denied for lack of merit.‰
The facts are as follows:

On April 3, 1992, Republic Act No. 7354, otherwise
known as „The Postal Service Act of 1992,‰ was enacted
and approved creating the Philippine Postal Corporation
and defining its powers, functions, and responsibilities.
Pursuant to the powers granted to it by the said charter,
the PPC Board of Directors issued and approved Board
Reso-
______________
1 Rollo, p. 30.
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VOL. 306, APRIL 30, 1999 597

2
lution No. 95-50, entitled „Approving the three-year
progressive increase of Representation and Travel
Allowance (RATA) benefits equivalent to 40% of the basic
salary of the officials of the Philippine Postal Corporation,
subject to the existing rules and regulations.‰ The
resolution reads in part:
BOARD RESOLUTION NO. 95-50
RESOLVED, as it is hereby resolved that the three year progressive

increase of the x x x (RATA) benefits of officials of the Philippine
Postal Corporation x x x equivalent to 40% of their basic salary, be
approved subject to the existing rules and regulations.
RESOLVED FURTHER, that the increases of RATA for 1995 of
the following officials to be implemented in the following manner, be
confirmed: xxx xxx xxx (c) of the 40% basic salaries of all officials
holding positions below the Assistant Postmaster Generals up to
Division Managers.
RESOLVED STILL FURTHER that an additional fifty percent
(50%) increase of the remaining balance thereof be implemented in
1996.
RESOLVED STILL FURTHER that the increase of the aforesaid
benefit equivalent to 40% of the basic salary of all concerned
officials be fully implemented in 1997.
x x x x x x x x x.
On April 26, 1995, to implement the foregoing board

resolution, then Postmaster General
3
Eduardo P. Pilapil
issued Circular No. 95-22, entitled „Guidelines
Implementing Board Resolution No. 95-50 prescribing new
rates of RATA of PPC officials.‰ To reproduce the relevant
parts of the circular:
CIRCULAR NO. 95-22
1. The following Officials and employees are entitled to RATA:
xxx xxx x x x.
1.6 Regional Operations Managers
_________________
2 Ibid., p. 31.
3 Ibid., p. 32.
598

1.7 Division Managers/Chiefs of equivalent

2. Payment of RATA, whether commutable or reimbursable, shall
be in accordance with the rates prescribed below for the total
allowances (50/50 share for each type of allowances):
Position 1995 1996 1997

xxx xxx xxx
2.7 Operations Managers or equivalent P5,100 P5,400 P5,740
(SG 26)
2.8 Division Managers/Chiefs or equivalent
(SG 25) 4,700 4,900 5,234

(SG 24) 4,200 4,400 4,734
Meanwhile, Republic Act No. 8174, otherwise known as

„The General Appropriations Act of 1996‰ was approved,
Section 35 of which fixes the monthly RATA rates of
government officials, to wit:
SEC. 35. Representation and Transportation Allowances.·The

following officials and those of equivalent rank as may be
determined by the Department of Budget and Management while in
the actual performance of their respective functions are hereby
granted monthly commutable representation and transportation
allowance payable from the programmed appropriation provided for
by their respective offices not exceeding the rates indicated below,
which shall apply to each type of allowance:
xxx xxx xxx
e. At P1,750 for assistant Bureau Regional directors or
equivalent;
f. At P1,625 for Chief of Divisions, identified as such in the
Personal Services Itemization x x x.‰
On October 23, 1996, respondent Corporate Auditor for

Philippine Postal Corporation (PPC) served the following
Notices of Disallowance (ND) on PPC:
(a) ND No. 96-0002-101(96) dated September 23, 1996, covering the

RATA of petitioners for the month of April 1996 in the total amount
of P65,650.00.
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VOL. 306, APRIL 30, 1999 599

(b) ND No. 96-0004-101(96) dated September 23, 1996 covering the

RATA of petitioners for May 1996 amounting to P65,350.00.
On December 12, 1996, the Auditor served another notice,

ND No. 96-0007 101(96) dated November 27, 1996,
covering the RATA of petitioners for June 1996 in the
amount of P64,525.00.
Subsequently, respondent Auditor served other Notices
of Disallowance covering the RATA allegedly paid in excess

of that authorized under Section 35, R.A. 8174.
On February 7, 1997, the new Postmaster General,
Irineo V. Intia, Jr. requested respondent Auditor to hold in
abeyance the settlement of the above disallowances
pending receipt of the legal opinion they had sought from
the Office of the Government Corporate Counsel (OGCC).
To this, respondent Auditor replied that the proper remedy
of petitioners is appeal under Section 37, Title VII of the
COA Manual on Certificate of Settlement and Balances
(CSB).
Accordingly, petitioners filed their Memorandum of
Appeal with respondent Commission for the reversal of the
AuditorÊs decision and the allowance of the implementation
of PPC Circular No. 95-22 as authorized by Board
Resolution No. 96-50. They relied on the following grounds:
1. Sections 21, 22, and 25 of R. A. No. 7354 (The

Postal Service Act of 1992), expressly empower the
PPC to establish its own progressive compensation
structure and fix the salaries and emoluments of
personnel·including the grant of additional
benefits like RATA·without being subjected to the
rules and regulations of the Compensation and
Position Classification Office or the Salary
Standardization Law (R.A. No. 6758).
2. The legal opinion of the Department of Budget and
Management (DBM) dated March 14, 1996 on
which the COA based its decision and which states
that pursuant to Section 6 of P.D. No. 1527, the
compensation structure of PPC is subject to review
and approval by the DBM, is not correct because
Section 6 of P.D. 1597 is unconstitutional as it
violates the rule against the passage of irrepealable
laws.
600

3. Section 13 of R.A. No. 7354 categorically exempts

PPC from submitting to Congress its annual budget
unless the PPC requires subsidy/guaranty of its
liability from the National Treasury.
4. Paragraph 1 of the special provisions in R.A. No.
8174 admits that corporations exempted from the
provisions of R.A. No. 6758 like PPC shall pay the
salaries and allowances not in accordance with the
Salary Standardization Law.
5. RATA is included in the term „emoluments,‰ the
payment of which PPC is authorized to make under
R.A. No. 7354.
On November 4, 1997, respondent Commission rendered

the decision now subject of the instant petition. The
assailed decision is reproduced in part:
„After a careful and judicious evaluation of the facts and pertinent

laws, rules and regulations herein obtaining, this Commission finds
the appeal devoid of merit. It must be noted that Sections 21, 22
and 25 of R.A. 7354 never intended to exempt the PPC from the
ambit of R.A. 6758. What these specific sections provide, especially
Section 25, is the exemption of the PPC from the coverage of the
rules and regulations of the Compensation and Position
Classification Office which relates only to the qualification, position
and salary grade of the employees concerned and not to the
payment of additional benefits including the increase in the
Representation and Transportation Allowance (RATA). Section 22
which provides for a progressive corporation (sic) structure for PPC
personnel authorizes the Corporation to grant salary increases
subject to either of two conditions stated therein. As to the
constitutionality of Section 6 of P.D. No. 1587, the matter is beyond
the competence of this Commission to rule upon. Thus, in the
absence of a contrary ruling by competent authority, this
Commission finds no cogent reason to hold the same as being
unconstitutional as alleged by herein appellants.
Insofar as the validity of the resolution fixing the allowances
(e.g. RATA) of its employees by PPCÊs Board of Directors is
concerned, this Commission fully adopts the stand taken by the
DBM in its legal opinion, dated March 14, 1996, which states that:
ÂAccordingly, the Resolutions or Circulars of the PPC granting additional

benefits or compensation to its employees without the requisite review
and approval by the President of the Philippines upon recommendation of

the DBM is believed to
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VOL. 306, APRIL 30, 1999 601

be an ultra vires act of the corporation which cannot be given legal effect
and recognition. Additional benefits or compensation that may be
granted to government officials/employees require a law and may not be
done by a mere expedient of a resolution or a circular of a GOCC, as in
the case of the PPC.Ê
The above legal opinion, according to the DBM is based on the

following reasons:
Â1. While there may be a semblance of exemption for the PPC

from the rules and regulations of the Compensation and
Position Classification Bureau, such exemption is subject to
the qualification that PPCÊs own system of compensation
and classification conforms as closely as possible with that
provided for under R.A. No. 6758.
2. Such PPC exemption should be appreciated in correlation
with the provision of Section 6 of P.D. 1597 x x x.Ê
While it is true that Section 13 of R.A. No. 7354 exempts the

PPC from submitting to Congress its annual budget unless it seeks
subsidy/guaranty of its liability from the National Treasury, it is
also true that Section 18 of the same Act provides that the PPC
thru its board shall submit to both Houses of Congress, together
with the AuditorÊs Report on the relevant accounts, an annual
report generally dealing with the activities and operations of the
Corporation during the preceding year xxx. The exemption under
Section 13 of R.A. No. 7354 does not in any way intend or show that
4
the Corporation is exempt from R.A. 6758.‰
Aggrieved by the aforequoted decision, petitioners filed this

petition before this Court, assigning the following errors:
I. THE COMMISSION ERRED IN HOLDING THAT PPC IS

NOT EXEMPT FROM THE SALARY STANDARDIZATION
LAW (R.A. NO. 6758).
II. THE COMMISSION ERRED IN CONFORMING WITH

THE DBM THAT THE RESOLUTION AND CIRCULAR OF
THE PPC GRANTING ADDITIONAL BENEFITS TO ITS
EMPLOYEES WITHOUT THE REQUISITE REVIEW AND
APPROVAL BY THE PRESIDENT OF THE PHILIPPINES
THROUGH THE DBM IS AN ULTRA VIRES ACT OF THE
CORPORATION.
________________
4 Ibid., pp. 28-30.
602

III. THE COMMISSION ERRED WHEN IT RULED THAT

THE MONTHLY RATA OF PPC OFFICIALS MUST
CONFORM TO THE AMOUNTS PRESCRIBED IN
SECTION 35 OF REPUBLIC ACT NO. 8174.
As to the first issue, petitioners argued that Sections 21,

22, and 25 of the PPC charter (R.A. No. 7354) exempt it
from the Salary Standardization Law or the Compensation
and Position Classification Office rules. The said provisions
read:
Section 21. Powers and Functions of the Postmaster General.·As

the Chief Executive Officer, the Postmaster General shall have the
following powers and functions:
x x x x x x x x x.
c) subject to the approval of the Board, to determine the staffing
pattern and the number of personnel, define their duties and
responsibilities, and fix their salaries and emoluments in
accordance with the approved compensation structure of the
Corporation.
x x x x x x x x x.
Section 22. Merit System.·The Corporation shall establish a
human resources management system which shall govern the
selection, hiring, appointment, transfer, promotion, or dismissal of
all personnel. Such system shall aim to establish professionalism
and excellence at all levels of the postal organization in accordance

with sound principles of management.
A progressive compensation structure, which shall be based on
job evaluation studies and wage surveys and subject to the BoardÊs
approval, shall be instituted as an integral component of the
CorporationÊs human resources development program. The
Corporation, however, may grant across the board salary increase
or modify its compensation structure as to result in higher salaries,
subject to either of the following conditions:
a) there are evidences of prior improvement in employee

productivity, measured by such quantitative indicators as
mail volume per employee and delivery times.
b) a law raising the minimum wage has been enacted with
application to all government employees or has the effect of
classifying some positions in the postal service as below the
floor wage.
Section 25. Exemption from Rules and Regulations of the

Compensation and Position Classification Office.·All personnel
and
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VOL. 306, APRIL 30, 1999 603

positions of the Corporation shall be governed by Section 22 hereof,

and as such shall be exempt from the coverage of the rules and
regulations of the Compensation and Position Classification Office.
The Corporation, however, shall see to it that its own system
conforms as closely as possible with that provided for under
Republic Act No. 6758.
Petitioners averred that since the PPC has the power

under Sections 21 and 22 of R.A. No. 7354 to fix its own
compensation scheme and Section 25 of said charter
expressly exempts it from the rules of the Compensation
and Position Classification Office, it is clear that PPC
Board Resolution No. 95-50 and PPC Circular 95-22 are
valid corporate acts that can be the basis of the payment of
RATA to PPC officials without prior approval from the
DBM.
As for the DBM legal opinion which was the basis for the
disallowance of the payments of the RATA, petitioners
assailed the same for being erroneous. According to the
DBM, notwithstanding the exemption of PPC from the
rules of CPCO granted under Section 25 of R.A. 7354, the
DBM has the power to review and approve the
compensation structure of PPC because of Section 6 of P.D.
No. 1597:
Sec. 6. Exemption from OCPC Rules and Regulations.·Agencies,

positions or groups of officials and employees of the national
government, including government-owned and controlled
corporations, who are hereafter exempted by law from OCPC
coverage, shall observe such guidelines and policies as may be
issued by the President governing position classification, salary
rates, levels of allowances, project and other honoraria, overtime
rates, and other forms of compensation and fringe benefits.
Exemptions notwithstanding, agencies shall report to the President,
through the Budget Commission, on their position classification and
compensation plans, policies, rates and other related details
following such specifications as may be prescribed by the President.
(emphasis supplied)
Petitioners, however, argued that Section 6, P.D. No. 1597

has already been repealed by Section 35 of R.A. No. 7354
which reads:
604

Sec. 35. All acts, decrees, orders, executive orders, instructions,

rules and regulations, inconsistent with the provisions of this Act
are repealed or modified accordingly.
They pointed out further that R.A. No. 7354 (The Postal
Service Act of 1992) being a special and later law, it
prevails over P.D. No. 1597, a general law which refers to
all government agencies and GOCCs covered by and those
exempted from the rules of the CPCO. For these reasons,
petitioners claimed that the power of the DBM to review

and approve PPCÊs resolutions and circulars implementing
the latterÊs compensation plans is no longer in force.
Petitioners likewise posited that Section 6, P.D. No. 1597
has no legal effect, it being in the nature of an irrepealable
provision of law. They pointed to the phrase „agencies x x x
of the national government, including government-owned
and controlled corporations, who are hereafter exempted by
law from coverage x x x,‰ as violative of the Constitutional
provision that legislative power shall be vested in the
legislature and the prohibition against the passage of
irrepealable laws. In effect, petitioners maintained, Section
6 limits the lawmaking powers of Congress by providing for
conditions to be applied to agencies or GOCCs that are yet
to be created.
Even assuming arguendo that Section 6, P.D. No. 1597
has legal effects, petitioners theorized, it cannot be
considered as requiring prior approval of the DBM since
said provision only requires the PPC to observe the
guidelines on compensation schemes and to report to the
President about its position classification and
compensation system.
Furthermore, petitioners asserted that scrutinizing the
Senate deliberations, it is clear that the management and
budgetary system of the PPC was being taken out of the
control of the DBM.
As to the applicability of Section 35 of R.A. No. 8174
limiting the amounts of RATA granted to certain
employees, petitioners argued that said provision does not
apply to the monthly RATA rates of PPC corporate officials,
as PPCÊs budget is not covered by the Appropriations Act or
R.A. No.
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VOL. 306, APRIL 30, 1999 605

8174. This, they said, is clear from Section 13 of the PPC

Charter (R.A. No. 7354):
Sec. 13. Annual Budget.·x x x Unless the Corporation shall require
a subsidy and/or a guarantee of its liability from the National

Treasury, its budget for the year need not be submitted to Congress
for approval and inclusion in the General Appropriations Act.
On the other hand, in its comment, the Office of the

Solicitor General argued that Section 6 of P.D. 1597 is valid
and subsisting, there having been no express or implied
repeal of the assailed provision. Moreover, the Solicitor
General explained that although Section 25 of the PPC
charter exempts the corporation from the CPCO rules and
regulations, under Section 6 of P.D. No. 1597, however, it is
still required to report the details of its compensation
system to the President through the DBM. The two
provisions in question are thus compatible and
reconcilable.
With respect to the argument that the PPC is exempted
from the coverage of the CPCO rules and regulations, the
Solicitor General observed that the said exemption is not
absolute as it refers only to exemption from the application
of rules and regulations relating to position and
compensation classification. Moreover, the Solicitor
General added, the term „compensation‰ in said law refers
to the salary structure of government personnel and not to
allowances.
From the foregoing, the issues of the present controversy
may therefore be summed up as follows: (1) whether the
PPC Board of Directors can, by itself, grant through a
resolution an increase in allowances to its officials without
said resolution going to the DBM for review and approval
and (2) whether the RATA granted to PPC officials falls
within the amounts provided in the General Appropriations
Act.
This Court rules in the negative on both issues.
First, it is conceded that the PPC, by virtue of its
charter, R.A. No. 7354, has the power to fix the salaries and
emoluments of its employees. This function, being lodged in
the
606

Postmaster General, the same must be exercised with the

approval of the Board of Directors. This is clear from
Sections 21 and 22 of said charter.
Petitioners correctly noted that since the PPC Board of
Directors are authorized to approve the CorporationÊs
compensation structure, it is also within the BoardÊs power
to grant or increase the allowances of PPC officials or
employees. As can be gleaned from Sections 10 and 17 of
P.D. No. 985 (A Decree Revising the Position Classification
and Compensation System in the National Government,
and Integrating the Same), the term „compensation‰
includes salaries, wages, allowances, and other benefits:
Sec. 10. The Compensation System.·The Compensation System

consists of (a) a Salary Schedule; (b) a Wage Schedule; (c) policies
relating to allowances, bonuses, pension plans, and other benefits
accruing to employees covered x x x. (emphasis supplied).
Sec. 17. Powers and Functions.·The Budget Commission
principally through the OCPC shall, in addition to those provided
under other sections of this Decree, have the following powers and
functions:
xxx xxx xxx
(g) Provide the required criteria and guidelines, in consultation
with agency heads as may be deemed necessary and subject to the
approval of the Commissioner of Budget, for the grant of all types of
allowances and additional forms of compensation to employees in
all agencies of the government.
Besides, allowances such as RATA are included in the term

„emoluments‰ which, under Section 21 of RA 7354, the
Postmaster General is authorized to grant to PPC
personnel with the approval of the Board of Directors.
BlackÊs Law Dictionary defines „emolument‰ as that which
is received as a compensation for services, or which is
annexed to the possession of office as salary, fees and
perquisites.
The Commission on Audit was, therefore, in error when
it held in its decision that „the exemption of the PPC from
the coverage of the rules and regulations of the
Compensation and Position Classification Office x x x
relates only to the
607
VOL. 306, APRIL 30, 1999 607

qualification, position and salary grade of the employees

concerned and not to the payment of additional benefits
including the increase in the Representation and
Transportation Allowance (RATA).‰
While the PPC Board of Directors admittedly acted
within its powers when it granted the RATA increases in
question, the same should have first been reviewed by the
DBM before they were implemented. Sections 21, 22, and
25 of the PPC charter should be read in conjunction with
Section 6 of P.D. No. 1597:
Sec. 6. Exemption from OCPC Rules and Regulations.·Agencies,

positions or groups of officials and employees of the national
government, including government-owned and controlled
corporations, who are hereafter exempted by law from OCPC
coverage, shall observe such guidelines and policies as may be
issued by the President governing position classification, salary
rates, levels of allowances, project and other honoraria, overtime
rates, and other forms of compensation and fringe benefits.
Exemptions notwithstanding, agencies shall report to the President,
through the Budget Commission, on their position classification and
compensation plans, policies, rates and other related details
following such specifications as may be prescribed by the President.
(emphasis supplied).
Contrary to petitionersÊ position, said provision still applies

and has not been repealed either expressly or impliedly.
Their
5
reliance on the general repealing clause in Section
35 of R.A. No. 7354 is 6
erroneous. The holding of this Court
in Mecano vs. COA is instructive: „The question that
should be asked is: What is the nature of this repealing
clause? It is certainly not an express repealing clause
because it fails to identify or designate the act or acts that
are intended to be repealed. Rather, it is an example of a
general repealing provision, as stated in Opinion No. 73, s.
1991. It is a clause which predicates the
________________
5 Sec. 35. All acts, decrees, orders, instructions, rules, and regulations,
inconsistent with the provisions of this Act are repealed or modified
accordingly.
6 216 SCRA 500 (1992).
608

intended repeal under the condition that a substantial

conflict must be found in existing and prior acts. The
failure to add a specific repealing clause indicates that the
intent was not to repeal any existing law, unless an
irreconcilable inconsistency and repugnancy exist in the
terms of the new and old laws. This latter situation falls
under the category of an implied repeal.‰
As the Solicitor General correctly observed, there is no
express repeal of Section 6, P.D. No. 1597 by R.A. No. 7354.
Neither is there an implied repeal thereof because there is
no irreconcilable conflict between the two laws. On the one
hand, Section 25 of R.A. No. 7354 provides for the
exemption of PPC from the rules and regulations of the
CPCO. On the other hand, Section 6 of P.D. 1597 requires
PPC to report to the President, through the DBM, the
details of its salary and compensation system. Thus, while
the PPC is allowed to fix its own personnel compensation
structure through its Board of Directors, the latter is
required to follow certain standards in formulating said
compensation system. One such standard is specifically
stated in Section 25 of R.A. No. 7354:
Section 25. Exemption from Rules and Regulations of the

Compensation and Position Classification Office.·All personnel
and positions of the Corporation shall be governed by Section 22
hereof, and as such shall be exempt from the coverage of the rules
and regulations of the Compensation and Position Classification
Office. The Corporation, however, shall see to it that its own system
conforms as closely as possible with that provided for under
Republic Act No. 6758. (emphasis supplied)
To sustain petitionersÊ claim that it is the PPC and PPC
alone that should ensure that its compensation system

conforms as closely as possible with that of R.A. No. 6758
will result in an invalid delegation of legislative power. If
such interpretation is adopted, the law would, in effect, be
granting PPC unfettered discretion to fix its compensation
structure, something the legislature could not have
intended.
As the Solicitor General put it, Section 6 of P.D. No. 1597
is the „detail‰ intended to fill the gap in such laws as R.A.
No.
609
VOL. 306, APRIL 30, 1999 609

7354 in order to ensure that delegation of legislative

authority will be „canalized within banks to keep it from
overflowing.‰
It should be emphasized that the review by the DBM of
any PPC resolution affecting the compensation structure of
its personnel should not be interpreted to mean that the
DBM can dictate upon the PPC Board of Directors and
deprive the latter of its discretion on the matter. Rather,
the DBMÊs function is merely to ensure that the action
taken by the Board of Directors complies with the
requirements of the law, specifically, that PPCÊs
compensation system „conforms as closely as possible with
that provided for under R.A. No. 6758.‰
Section 25 of R.A. No. 7354 and Section 6 of P.D. No.
1597 can thus be read together and harmonized to give
effect to both provisions. This Court has held that statutes
should be construed in light of the objective to be achieved
and the evil or mischief to be suppressed, and they should
be given such construction as will advance the object, 7
suppress the mischief, and secure the benefits intended.
Clearly, therefore, no implied repeal can be deduced in
this case. Worth reiterating is the rule in statutory
construction that repeals by implication are not favored.
When statutes are in pari materia, they should be
construed together. A law cannot be deemed repealed
unless it is clearly manifest that the legislature so intended
it.
As regards petitionersÊ argument that P.D. No. 1597
cannot be given any legal effect as it is unconstitutional
because it is in the nature of an irrepealable law, suffice it
to say that this Court will refrain from striking down a law
if the case can be decided on other grounds. The Court will
not touch the issue of unconstitutionality unless it is the
very lis mota of the case. Thus, the Supreme Court held: „It
is a well-established rule that a court should not pass upon
a constitutional question and decide a law to be
unconstitutional or invalid, unless such question is raised
by the parties and that when it is raised, if the record also
presents some other ground upon which the
_________________
7 Paat vs. Court of Appeals, 266 SCRA 167 (1997).
610

court may raise its judgment, that course will be adopted

and the constitutional question will be left 8 for
consideration until such question will be unavoidable.‰
With respect to the second issue of whether the RATA
granted to PPC officials must fall within the amounts
provided for in the General Appropriations Act, as stated
earlier, we rule in the negative.
Section 13 of the PPC charter expressly provides for
PPCÊs fiscal autonomy. Thus, unless PPC requires a
subsidy and/or a guarantee of its liability from the National
Treasury, its annual budget need not be submitted to
Congress for approval and included in the General
Appropriations Act.
The intention of the lawmakers here is to promote the
efficiency of the postal service by allowing the PPC to use
its profits from its operations to upgrade its facilities and
equipment and provide incentives for its personnel to
render better services. Specifically, fiscal autonomy allows
the PPC to attract and keep professional and competent
people within its ranks.

To sum up, the PPC being a government-owned and
controlled corporation with an original 9
charter, it falls
within the scope of the Civil Service. Thus, as regards
personnel matters, the Civil Service Law applies to the
PPC. Its Board of Directors is authorized under its charter
to formulate and implement its own system of
compensation for its personnel, including the payment of
RATA. In the exercise of such power, it is not required to
observe the rules and regulations of the Compensation and
Position Classification Office. Neither is it required to
follow strictly the amounts provided for in the General
Appropriations Act as its annual budget is not covered
thereby. However, since the PPC charter expressly exempts
it from the rules and regulations of the CPCO, said
______________
8 Sotto vs. Commission on Elections, 76 Phil. 516 (1946).

9 Sec. 6, Book V, Title I, Subtitle A, Revised Administrative Code of
1987.
611
VOL. 306, APRIL 30, 1999 611

Board is not required to follow the CPCOÊs guidelines in

formulating10 a compensation system for the PPC
employees.
In other words, the general rule is that the PPC is
covered by the Civil Service Law as regards all personnel
matters except those affecting the compensation structure
and position classification in the corporation which are left
to the PPC Board of Directors to formulate in accordance
with law. It must be stressed that the BoardÊs discretion on
the matter of personnel compensation is not absolute as the
same must be exercised in accordance with the standard
laid down by law, that is, its compensation system,
including the allowances granted by the Board to PPC
employees, must strictly conform with that provided for
other government agencies under R.A. No. 6758 (Salary
Standardization Law) in relation to the General

Appropriations Act. To ensure such compliance, the
resolutions of the Board affecting such matters should first
be reviewed and approved by the Department of Budget
and Management pursuant to Section 6 of P.D. No. 1597.
WHEREFORE, premises considered, the petition is
hereby DISMISSED and the assailed decision dated
November 4, 1997 is AFFIRMED with the following
MODIFICATIONS:
(a) The exemption of the Philippine Postal Corporation

from the coverage of the rules and regulations of
the Compensation and Position Classification Office
includes, not only the fixing of the qualification,
position, and salary grade of the CorporationÊs
employees but also the payment of additional
benefits, including increases in their
Representation and Transportation Allowance;
(b) The Representation and Transportation Allowance
granted to the concerned employees of the
Corporation need not be limited to the amounts
provided for in the General Appropriations Act; and
(c) However, the compensation system set up must
conform as closely as possible with that provided for
other government agencies under R.A. No. 6758 in
relation to the Gen
_________________
10 Sec. 25, R.A. No. 7354.
612

People vs. Agsunod, Jr.
eral Appropriations Act and must, moreover, be

reviewed and approved by the Department of
Budget and Management pursuant to Section 6 of
P.D. No. 1597.
SO ORDERED.
Davide, Jr. (C.J.), Bellosillo, Melo, Kapunan,

Mendoza, Pardo, Buena, Gonzaga-Reyes and Ynares-
Santiago, JJ., concur.
Puno, Panganiban, Quisumbing and Purisima, JJ.,
In the result.
Vitug, J., I concur but except from the view that the
compensation system requires the approval of DBM.
Petition dismissed, judgment affirmed with

modifications.
Note.·When a subsequent law encompasses entirely

the subject matter of the former enactments the latter is
deemed repealed. (David vs. Commission on Elections, 271
SCRA 90 [1997])
··o0o··
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SUPREME COURT REPORTS ANNOTATED VOLUME 306 24/06/2019, 2*03 PM

VOL. 306, APRIL 30, 1999 593

IRINEO V. INTIA, JR., Postmaster General, Philippine

Administrative Law; Allowances; It is conceded that the PPC,

594 SUPREME COURT REPORTS ANNOTATED

Intia, Jr. vs. Commission on Audit

can be gleaned from Sections 10 and 17 of P.D. No. 985 (A Decree

Statutory Construction; The failure to add a specific repealing

VOL. 306, APRIL 30, 1999 595

Intia, Jr. vs. Commission on Audit

in Mecano vs. COA is instructive: „The question that should be

follow certain standards in formulating said compensation system.

596 SUPREME COURT REPORTS ANNOTATED

Intia, Jr. vs. Commission on Audit

materia, they should be construed together. A law cannot be deemed

SPECIAL CIVIL ACTION in the Supreme Court.

The facts are stated in the opinion of the Court.

In this special civil action under Rule 64 of the New Rules

and Transportation Allowance (RATA) of certain officials of

„Upon all the foregoing considerations, this Commission affirms the

The facts are as follows:

VOL. 306, APRIL 30, 1999 597

BOARD RESOLUTION NO. 95-50

RESOLVED, as it is hereby resolved that the three year progressive

On April 26, 1995, to implement the foregoing board

CIRCULAR NO. 95-22

1. The following Officials and employees are entitled to RATA:

598 SUPREME COURT REPORTS ANNOTATED

1.7 Division Managers/Chiefs of equivalent

Position 1995 1996 1997

(SG 25) 4,700 4,900 5,234

Meanwhile, Republic Act No. 8174, otherwise known as

SEC. 35. Representation and Transportation Allowances.·The

On October 23, 1996, respondent Corporate Auditor for

(a) ND No. 96-0002-101(96) dated September 23, 1996, covering the

VOL. 306, APRIL 30, 1999 599

(b) ND No. 96-0004-101(96) dated September 23, 1996 covering the

On December 12, 1996, the Auditor served another notice,

of Disallowance covering the RATA allegedly paid in excess

1. Sections 21, 22, and 25 of R. A. No. 7354 (The

600 SUPREME COURT REPORTS ANNOTATED

3. Section 13 of R.A. No. 7354 categorically exempts

On November 4, 1997, respondent Commission rendered

„After a careful and judicious evaluation of the facts and pertinent

ÂAccordingly, the Resolutions or Circulars of the PPC granting additional

and approval by the President of the Philippines upon recommendation of

VOL. 306, APRIL 30, 1999 601

The above legal opinion, according to the DBM is based on the

Â1. While there may be a semblance of exemption for the PPC

While it is true that Section 13 of R.A. No. 7354 exempts the

Aggrieved by the aforequoted decision, petitioners filed this

I. THE COMMISSION ERRED IN HOLDING THAT PPC IS

II. THE COMMISSION ERRED IN CONFORMING WITH

4 Ibid., pp. 28-30.

602 SUPREME COURT REPORTS ANNOTATED

III. THE COMMISSION ERRED WHEN IT RULED THAT

As to the first issue, petitioners argued that Sections 21,

Section 21. Powers and Functions of the Postmaster General.·As

and excellence at all levels of the postal organization in accordance

a) there are evidences of prior improvement in employee

Section 25. Exemption from Rules and Regulations of the

VOL. 306, APRIL 30, 1999 603

positions of the Corporation shall be governed by Section 22 hereof,